Originally created 02/13/98

Opponents protest MEAG's telecommunications plan



ATLANTA -- The Municipal Electric Authority of Georgia, supplier of electricity to Georgia's city-run utilities, is seeking permission to use its transmission lines to provide telecommunications services like Internet access and cable TV.

But opponents say the government entity can't legally provide such non-energy services and would have an unfair advantage over private providers if it could.

MEAG, which generates power for 49 municipal utilities serving about 635,000 customers, wants to link those systems with a $35 million fiber-optic network it is building along its 1,200-mile transmission line.

MEAG insists it is not looking to venture into the telephone or cable business itself, but simply wants to sell the fiber-optic system's excess capacity to telecommunications providers.

"We're just trying to find ways to use that excess capacity," MEAG spokeswoman Debra Underwood said Thursday. "We're not going to provide telephone service but if there is a company that wants to use it we may provide that fiber to the company."

The fiber-optic network could carry telephone, cable television, Internet and other communication services.

That has prompted protests from some private utilities.

BellSouth Telecommunications and the Cable Television Association of Georgia argue that since MEAG was created by the General Assembly to sell bulk electricity, it cannot venture into other areas of business. If it does, they say, MEAG would have an unfair advantage over private utilities.

"As a creature of the state, as a government entity, they enjoy certain privileges that the private sector does not enjoy," said Nancy Horne, president of the 96-system cable association.

Tax-free status, immunity from antitrust laws and the ability to obtain low- and no-cost capital are among MEAG's perks, Ms. Horne said.

"There are some inherent inequities in a government entity competing with private enterprise," she said. "We're not saying that they shouldn't be allowed to compete, but if they do so they should do it on the same basis."

The Public Service Commission must first decide whether MEAG is eligible to apply to become a telecommunications provider.

On Thursday, the PSC staff recommended that the full commission rule that MEAG does not have the authority to provide non-energy services. The full commission is expected to vote next week.

MEAG can continue to build the fiber-optics network without PSC approval but it cannot sell the excess capacity.

If MEAG wins PSC approval, it will then have to apply to become a telecommunications provider and prove it is technically and financially capable of providing such services, PSC spokesman Shawn Davis said.

The final decision will ultimately be made in court. Long, Aldridge & Norman, one of Atlanta's largest law firms, has been hired to represent the cable association.

"No matter what we decide Tuesday, one or the other side is going to appeal it," Davis said.